The Research and Development (R&D) Tax Credit is a government-sponsored tax incentive offered to companies who create or improve a product or process in the course of their business.
The credit dates back to 1981, when it first became available to taxpayers on a temporary basis. In 2015, when the Protecting Americans from Tax Hikes (PATH) Act was put in place, the R&D credit became a permanent part of the tax code and with it, revised qualifications that greatly expanded the eligibility for businesses to qualify. With these changes, qualifying small businesses may be eligible to claim the Payroll Tax Credit to offset some of their payroll tax liability.
Many businesses are unaware that their daily operations could qualify for a dollar-for-dollar tax credit, irrespective of industry or company size. Additionally, most states offer an R&D credit that can supplement the federal R&D credit, and qualifying businesses can claim both!
To be eligible for the R&D Tax Credit, the IRS has enforced a four-part test to determine qualified R&D activity. An activity must meet all four parts to be considered a qualifying research activity. The four parts are:
To be eligible for the R&D Tax Credit, the IRS has enforced a four-part test to determine qualified R&D activity. An activity must meet all four parts to be considered a qualifying research activity. The four parts are:
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Explore the tax saving benefit of the Research & Development (R&D) Tax Credit, irrespective of your company size or industry.
Download nowThe R&D Tax Credit can help startups and small businesses offset some of their payroll tax liability. In order to claim the Payroll Tax Credit, companies must meet certain requirements, including qualifying as a Qualified Small Business.
To be considered a Qualified Small Business, your company must not have gross receipts for any years preceding the 5 tax year period ending with the credit year. In addition, the year you are claiming, gross receipts must be below $5M. Find out if you are eligible to claim the Payroll Credit.
The R&D Tax Credit can help startups and small businesses offset some of their payroll tax liability. In order to claim the Payroll Tax Credit, companies must meet certain requirements, including qualifying as a Qualified Small Business.
To be considered a Qualified Small Business, your company must not have gross receipts for any years preceding the 5 tax year period ending with the credit year. In addition, the year you are claiming, gross receipts must be below $5M. Find out if you are eligible to claim the Payroll Credit.
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